State Whether Each Situation Is a Prepaid Expense (PE), Unearned

question 47

Short Answer

State whether each situation is a prepaid expense (PE), unearned revenue (UR), accrued revenue (AR) or an accrued expense (AE).
1. Unrecorded interest on savings bonds is $245.
2. Property taxes that have been incurred but that have not yet been paid or recorded amount to $300.
3. Legal fees of $1,000 were collected in advance. By year end 60 percent were still unearned.
4. Prepaid insurance had a $500 balance prior to adjustment. By year end, 40 percent was still unexpired.

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Definitions:

Personal Bankruptcy

A legal proceeding for individuals unable to meet their financial obligations, allowing for the discharge of debts under specific conditions.

Fixed-Term Contract

An employment agreement for a specific period of time, after which it automatically terminates unless renewed.

Partnership Agreement

A legal document that outlines the terms and conditions under which a partnership operates.

Tree Surgeons

Professionals specializing in the care and maintenance of trees, including pruning, diagnosing disease, and ensuring tree health.